January 19: Investment Board Nepal (IBN) has asked Zurich Airport International AG of Switzerland to present a Letter of Intent (LoI) for construction of the much-hyped Nijgadh International Airport. The request comes despite an interim order issued by the Supreme Court to not cut any trees at the airport construction site.
Following the request, Zurich International AG will now have to submit a detailed technical and financial proposal within 45 days, as informed by IBN on Friday (January 17). Maha Prasad Adhikari, chief executive officer (CEO) of IBN, stated, “The company will be awarded the contract only if it meets all the criteria and if the state finds its proposal satisfactory.
The board had already shortlisted the company in September for construction of the airport under the public-private partnership model. Under this model, the company will also be responsible for operating the airport after its completion and will only hand it over to the government after a fixed period of time of up to 30 years.
IBN has stated that it will complete the process of appointing a company within the next three months.
The cost for the first phase of the construction process stands at around US$ 1.2 billion, which will be borne by the Swiss company. The government will not be responsible for the ‘viability gap funding’ in this project, according to the board.
The airport, located at a distance of 175 kilometers from the capital, is expected to ease the air traffic load faced by Tribhuvan International Airport. The airport was also one of the projects showcased at the International Investment Summit organized by the government in March 2019.
According to the board, seven companies had initially expressed their willingness to construct the airport. CEO Adhikari informed, “Zurich International was shortlisted because it met all the requirements.” A company needed to have a net worth of US$ 1 billion and an experience of 10 years in order to be considered for the project.
Zurich Airport operates Zurich Airport and Bangalore International Airport and was recently awarded a contract by the Indian government to construct a new airport in Uttar Pradesh. The Swiss government is the primary investor in the company.
However, environmentalists have been expressing their concerns about the airport saying the Environmental Impact Assessment (EIA) report was approved without adequate consultations and transparency. Around 2.5 million trees will be cut down for the construction of the airport. But the Ministry of Culture, Tourism and Civil Aviation calls this number exaggerated.
Environmentalists have been asking the government to seek alternative sites for the airport saying it will have negative impacts on the area’s flora and fauna. But the government has said that it will not seek any alternatives to Nijgadh.